Judgment:
1. The petitioners are the Life Insurance Corporation of India while Respondents No. 1 and 2 are All India Insurance Employees' Association and All India LIC Employees' Federation, respectively.
2. The petitioners have challenged in this writ petition an Award dated 31.1.1986 of the Central Government Industrial Tribunal No. 1 Bombay in Reference No. CGIT-11 of 1983. Under an order dated 29.10.1983 the Central Government in exercise of powers under Section 10(1)(d) of the Industrial Disputes Act, 1947 referred the following dispute for adjudication to the Central Government Industrial Tribunal No. l, Bombay constituted under Section 7A of the Industrial Disputes Act. The reference was:
'Whether the action of the management of Life Insurance Corporation of India, Bombay in closing the cadre of Superintendent (Admn.), Superintendent (Typing pool), Superintendent (Adrema) and Superintendent (Machine) and in denying promotional avenues to the section Heads/Higher grade assistants in all the offices of LIC of India all over India without getting the LIC of India (Promotion) Regulations, 1976 duly amended is justified If not, what relief are the concerned workmen entitled ?'
3. The cadre of Superintendents, Section Heads/Higher Grade Assistants are cadres of Class III employees. The cadre of Superintendent is a supervisory cadre. The cadre of Assistant Administrative Officers is also a supervisory cadre but it is in Class I. It seems that prior to 1981, Superintendents and Section Heads in Class III posts were eligible for promotion as Asst. Administrative Officers. In 1981 on account of reorganisation of work at the branch level, the petitioners decided to appoint Asst. Administrative Officers at the head of branches. Till then some of the branches had Superintendents while other branches had Section Heads as well as Asst. Administrative Officers. The petitioners decided not to make any further appointment to the posts of Superintendent and thereby to gradually close the cadre of Superintendents, appointing instead Asst. Administrative Officers. This policy was challenged by Respondents No. l and 2 resulting in the above reference.
4. The Award has upheld the contention of respondents No. l and 2 and has directed the petitioners to make promotions to the post of Superintendents up to 1st June 1985 in the manner laid down in the Award. The present petition challenges this Award.
5. The first contention of the petitioners relates to the jurisdiction of the Central Government Industrial Tribunal to entertain a dispute which will affect the functioning of the petitioners all over India. It is submitted by the petitioners that the Central Government Industrial Tribunal No. l, Bombay has only a limited territorial jurisdiction confined to Maharashtra and Gujarat and it has no jurisdiction to decide disputes which have an effect all over India. The petitioners submit that a National Tribunal ought to have been constituted for this purpose under the Industrial Disputes Act, 1947. In its absence the award which is to be implemented all over India is without jurisdiction.
6. Section 2(r) of the Industrial Disputes Act, 1947 defines 'Tribunal' as 'an Industrial Tribunal constituted under Section 7A'. Section 2(11) defines 'National Tribunal' as 'a National Industrial Tribunal constituted under Section 7B'. Section 7A provides that the appropriate Government may, by notification, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter whether specified in the Second Schedule or the Third Schedule and for performing such other things as may be assigned to them under the said Act. The Second and Third Schedules deal with the subject-matter of various disputes. There is nothing in Section 7A or the Second Schedule and the Third Schedule restricting the territorial jurisdiction of Tribunals under Section 7A.
7. Section 7B deals with National Tribunals. It provides that the Central Government may by notification constitute one or more National Industrial. Tribunals for the adjudication of industrial disputes which in the opinion of the Central Government involve question of a national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in or affected by such disputes.
8. Section 10 which deals with reference of disputes to Industrial Tribunals provides under Sub-section. (1)(d) for reference of dispute relating to matters specified in the Second or Third Schedule to a Tribunal for adjudication as set out therein. Section 10(1a) provides that where the Central Government is of opinion that any industrial dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be interested in or affected by such dispute and that the dispute should be adjudicated by a National Tribunal, then the Central Government, whether or nor it is the appropriate Government may refer the dispute, whether it relates to any matter under Second Schedule or Third Schedule, to a National Tribunal for adjudication.
9. Section 10(2A) states that the order of reference shall specify the period within which such Tribunal or National Tribunal, inter alia, shall submit its award. In none of these provisions is there any limitation on the territorial jurisdiction of the Central Government Industrial Tribunal. In describing the nature of dispute which may be referred to a National Tribunal the Act does provide that if a dispute is likely to affect industries in more than one State, the dispute may be referred to a National Tribunal. But this is a matter of discretion which the Central Government has to exercise in deciding whether or not to appoint a national tribunal. The language of Section 7B and Section 10(1a) and the phrase 'the Central Government may constitute' or 'the Central Government may refer' used in these sections indicates that the Central Government has a discretionary power to constitute a national tribunal in disputes, which in its opinion, are of the kind referred to in these sections and if it is of the view that such dispute should be decided by a national tribunal. The Central Government, therefore, was not bound to constitute a national tribunal. What is more important and relevant, these sections do not expressly or impliedly, curtail the territorial jurisdiction of other tribunals such as a Central Government tribunal. The award, therefore, cannot be considered as beyond the territorial jurisdiction of the Central Government tribunal.
10. In this respect my attention was drawn to a decision in the case of Indian Oxygen Ltd. v. Their Workmen reported in : (1969)ILLJ235SC where the State Government had referred certain disputes to the State Tribunal. The employer had several establishments in the State. Looking to the terms of reference the Court held that the reference was only confined to workmen in the establishment of the employer at Jam-shedpur and it would not apply to the workmen of other establishments. This judgment has no relevance to the present case.
11. In the case of Lipton Ltd. v. Their Employees reported in : (1959)ILLJ431SC dispute was referred by the Delhi Administration to the Addl. Industrial Tribunal, Delhi for adjudication. One of the contentions raised before the Supreme Court was that the Industrial Tribunal had no jurisdiction to make an award in respect of employees of the Delhi Office who were employed outside the State of Delhi. The Supreme Court held that all the employees of the Delhi Office, whether they worked in Delhi or not, received their salaries from the Delhi Office and they were controlled by the Delhi Office and hence the Delhi State Government was the appropriate Government within the meaning of Section 2 of the Industrial Disputes Act, 1947 relating to dispute which arose and under Section 18 of the Act the award made by the Tribunal was binding on all employees employed in the Delhi Office. Once again this decision is of no direct relevance to the point at issue.
12. I have not been shown any authority to the effect that when the award affects employees in more than one State and when the Tribunal is properly constituted by the appropriate Government, the Tribunal will not have any jurisdiction unless it is a national tribunal constituted by the Central Government.
13. In order to consider the merits of the dispute, it is first necessary to consider the provisions of the Life Insurance Corporation Act and the Regulations framed under it. Under Section 49 of the Life Insurance Corporation Act, 1956, prior to its amendment in 1981, the Corporation, with the previous approval of the Central Government, was empowered to make regulations to provide for, inter alia, the terms and conditions of service of employees of the Corporation. These regulations were accordingly framed. The relevant regulations are Life Insurance Corporation of India (Promotion) Regulations, 1976. By virtue of Life Insurance Corporation (Amendment) Act, 1981 the Regulations framed by the Corporation with respect to the terms and conditions of service of employees were deemed to be rules made by the Central Government under the amended Section 48 of the L.I.C.Act. These Regulations were, therefore, statutory Regulations validly in force at the relevant time. Under Regulations 5 of the Life Insurance Corporation of India (Promotion) Regulations, 1976 promotions shall be effected only against vacancies in sanctioned posts.
14. In connection with promotions the Board of Life Insurance Corporation of India had met from time to time to fix the cadre strength of officers and the number of vacancies to be filled, inter alia, by promotion. My attention was drawn to a note for the Board of Directors, L.I.C. prepared by the Managing Director in August 1959 relating to proposals for fixation of cadre strength for officers. It states that the posts of Junior Officers (i.e. Asst. Administrative Officers) and Superintendents are ordinarily considered as interchangeable particularly from the point of view of fixation of cadre strength. The note goes on to say that in considering promotions the combined strength of Superintendents and Junior Officers should be taken into account. The decision regarding requirements of Superintendents and Junior Officers in each office may be left to the Staff Sub-Committee in each zone. The guiding principle would, however, be that one Superintendent or Junior Officer would be provided in each of the main departments of the Divisional Office. Where the staff in a particular department exceeds 25, one or more Superintendents may be posted on the basis of one Superintendent for every 20 staff members or so.
15. Fixation of cadre strength is important because existing vacancies will depend upon the cadre strength of the posts in which vacancies are to be determined. And promotion is made against existing vacancies. The extract from the Minutes of the Board meeting held on 24.8.1959 also shows that it was decided that when the strength in a particular department exceeds 25 and reaches the level of 32 another Superintendent or Junior Officer should be provided.
16. From time to time the Board has fixed the cadre strength of, inter alia, Superintendents and Asst. Administrative Officers on the basis of recommendations made by. the Zonal Staff Selection Committee. The Notes and Decisions in this connection show the figures relating to the number of Assistant Administrative Officers/Superintendents which were allowed for various departments. These have been relied upon by the petitioners to show that in order to determine the cadre strength, the posts of Superintendents and Asst. Administrative Officers were combined.
17. The recommendations, however, apart from showing the combined strength of two cadres, also give a break-up relating to posts of Superintendents and Asst. Administrative Officers. The directors, therefore, appear to have considered the total number of posts by combining the cadres of Asst. Administrative Officers and Superintendents. The allotment of Superintendents or Asst. Administrative Officers is then made. The manner of determining the number of available posts in these two cadres, therefore, suggests that the posts of Superintendent and Asst. Administrative Officer are inter-changeable.
18. Thus, right up to 1981 the practice appears to be to consider the proposed strength of the combined cadre of Superintendents and Asst. Administrative Officers. Thereafter the Board has decided upon the actual number of Superintendents and the actual number of Asst. Administrative Officers to fill the sanctioned posts.
19. In 1981, however, the Life Insurance Corporation decided on decentralisation of various functions to be given to the branches. It felt the need for strengthening the branches by posting Additional Officers on the administrative side. The Board, at its meeting held on 11.3.1981, approved the provision of an Addl. Administrative Officer as may be decided by the Chairman, in branches where the number of staff sanctioned in Class III was 25 or more. It also granted approval to the appointment of as many Administrative Officers as may be decidedupon by the Chairman to meet the requirements of restructured branches. In effect it was decided to upgrade the working of branches and appoint there an Asst. Administrative Officer instead of a Superintendent. It was decided that the vacancies of Superintendents would not be filled in. In fact, in the statement which the petitioners filed before the Central Government Industrial Tribunal, they stated at Note (5) that the cadre of Superintendents was closed by the order of the Chairman of the Corporation in December 1980, and the posts of Superintendents have not been filled in after 1981. Wherever the posts of Superintendents have fallen vacant, appointments have been made against those vacancies in the cadre of Asst. Administrative Officers.
20. This decision of the Corporation was the subject-matter of the Reference before the Central Industrial Tribunal. It is the contention of the respondents that by virtue of this decision, changes have been effected in the statutory service conditions of the employees, particularly in relation to their promotions to the posts of Superintendents. They submit that this can only be done by amending the statutory regulations; it cannot be done by an administrative decision taken by the Chairman. Such an amendment was in effect made on 11.4.1985 by reason of a notification issued by the Government of India, Ministry of Finance, amending the Life Insurance Corporation of India Class III and Class IV Employees (Revision of Terms and Conditions of Service) Rules, 1985. This was done in exercise of powers conferred by Section 48 of the L.I.C. Act, 1956. Under Clause 5 of this notification it was provided that there shall be no fresh appointment or promotions to the cadre of Section Heads and Superintendents on or after the 1st July 1985. The respondents contend that between 1981 and April 1985 the action 'taken by the Corporation in not filling the posts of Superintendents is without any authority of law.
21. The past practice of the Life Insurance Corporation establishes two things : (1) That there were separate cadres of Superintendents and Asst. Administrative Officers. Obviously one was a Class III post and the other was a class I post. (2) But, for determination of sanctioned strength of each cadre both the cadres were combined and were to some extent considered inter-changeable depending upon administrative exigencies of the Corporation, The strength of cadre which was sanctioned as per the recommendations of the Zonal Staff Selection Committee from time to time was combined strength of both cadres but with separate allocation for Superintendents as well as Asst. Administrative Officers.
22. In view of this practice, is it open to the Chairman of the Life Insurance Corporation to give a directive that all available vacancies in the combined cadres of Superintendents and Asst. Administrative Officers shall be filled only by Assistant Administrative Officers? From the facts set out above, it is clear that this directive was not an administrative adjustment of posts between Superintendents and Asst. Administrative Officers. The decision was taken as a policy decision in view of the fact that the Corporation wanted branches to be headed by Asst. Administrative Officers only. The intention was, therefore, not to fill in any vacancy in the cadre of Superintendent with a view to eventually closing the cadre of Superintendents. This cannot be considered an administrative adjustment of cadre strength between Superintendents and Asst. Administrative Officers. The decision in effect was to close the cadre of Superintendents. In fact, this is what is stated by the petitioners themselves.
23. If this is so, then, clearly the statutory service conditions of employees of respondents No. 1 and 2 are affected by such a decision because the statutory regulations dealing with promotions provide for channels of promotion to various posts including the post of Superintendent. The Schedule to the Life Insurance Corporation of India (Promotion) Regulations, 1976 describes the categories of employees who are eligible for promotion to the post of Superintendent, These are higher grade assistants and sectionheads. This channel of promotion was sought to be changed. This could not have been done without amending the Regulations concerned.
24. In the case of The, Life Insurance Corporation Higher Grade Assistants Association v. Life Insurance Corporation of India reported in : (1973)ILLJ87Mad the Madras High Court was required to consider a settlement arrived at between some Unions of L.I.C. employees and L.I.C. of India under which promotion rules were amended. The L.I.C. Higher Grade Assistants Association had not been consulted in the matter. It challenged the settlement arrived at. One of the contentions raised before the High Court was that the terms and conditions are in the nature of administrative instructions issued by the Chairman and, therefore, all the employees are necessarily within its grip. The Court held that the arrangement in question touched upon the terms and conditions of service of the employees of the Corporation. They did not have the approval of the Central Government nor were the arrangement notified in the official gazette as required under Section 49 of the L.I.C. Act. If the arrangements in fact affected the terms and conditions of service, then, such a settlement would be hit by non-compliance with the specific mandate of Section 49(1).
25. In this connection a reference may also be made to the case of S.R.S Mony v. Life Insurance Corporation of India reported in : (1972)IILLJ546Ker , paragraph 7. In this case before the Kerala High Court the employees had challenged a notice issued under Section 9A of the Industrial Disputes Act proposing change of conditions of service pursuant to a settlement reached between the Corporation and some trade unions representing certain classes of employees. One of the contentions raised before the Kerala High Court was that such a change could not be effected without compliance with the provisions of Section 49 of the L.I.C. Act. The Court, however, did not directly pronounce upon this contention. It felt that it was not necessary to go into this questionas the decision could be given on othergrounds.
26. That case is therefore not directly relevant. In the present case, however, there is a change effected in Promotion Regulations by virtue of closing the cadre of Superintendents. Such a change requires compliance with Section 49 or amended Section 48C of the L.I.C. Act, 1956.
27. Mr. Paranjpe, learned Counsel for the petitioners, has contended that in fact the cadre of Superintendents was not closed because there were a number of Superintendents who were already appointed in the cadre whose services were not affected in any manner. He submitted that the action of the Chairman was merely an administrative adjustment between the strength of two cadres of Superintendents and Asst. Administrative Officers. This submission, however, must be rejected in the circumstances of the present case because although the cadre of Superintendents was not abolished, promotions to the cadre of Superintendents were stopped. This was admittedly done with a view to eventually close the cadre of Superintendents. There was, therefore, a change in the channel of promotion. This change. required a corresponding change in the Promotion Regulations.
28. The decision of the Life Insurance Corporation was undoubtedly a bona fide decision taken looking to the requirements of the Corporation. The Chairman took steps in order to upgrade the working of branches of Life Insurance Corporation since a decision was taken to decentralise the working of the Corporation. The Corporation, therefore, felt a bona fide need to appoint Asst. Administrative Officers to branches. But for this purpose they cannot rely entirely on administrative instructions when there are statutory regulations which govern the channels of promotions.
29. It was next submitted by the respondents that notice under Section 9-A of the Industrial Disputes Act, 1947 was not givento effect change in the conditions of service. Hence also the directions were bad in law. Section 9-A of the Industrial Disputes Act lays down that no employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule shall effect such change without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected. Notice is required only when any change in the conditions of service relating to matters specified in the Fourth Schedule are required to be effected. In the Fourth Schedule the clause relied upon is Clause 11, which deals with 'any increase or reduction (other than casual) in the number of persons employed or to be employed in any occupation or process or department of shift, not occasioned by circumstances over which the employer has no control'. This clause has no application to the present case because there has not been any increase or reduction in the number of persons employed. What is changed is merely the channel of promotion. Therefore, the provisions of Section 9-A of the Industrial Disputes Act are not attracted. In the case of G.P. Vahal v. The Manager, Reserve Bank of India. Kanpur reported in 1983 L.I.C. 738 the Allahabad High Court held that promotion to higher posts dealt with in the Modified Scheme of promotion of the Reserve Bank does not fall in any of the entries contained in Schedule IV. Consequently notice as contemplated by Section 9-A was not necessary.
30. It has, however, been urged by respondents No. 1 and 2 that a change in the channel of promotion is a change in the conditions of service. They cited in support the decision in the case of Reserve Bank of India, Bombay v. C. T. Dighe reported in 1981(II) LLJ 292, This case pertains, inter alia, to Section 33(1)(a) of the Industrial Disputes Act, 1947. The Supreme Court held that a change in the chance of promotion pending reference was not a change in service conditions under Section 33(1)(a). This decision has no application here.
31. The next case cited was Air India Cabin Crew Association v. Air India reported in 1981 Bom. C R 646. In that case Section 9-A was held not applicable because the establishment was exempt from that section. Moreover, it was held that no notice of change was necessary because the employees were governed by rules and regulations notified by the appropriate Government. This case is of no relevance here.
32. The case of Mohd. Shujat Ali v. Union of India reported in : (1976)IILLJ115SC was also cited to show that a right of promotion or a right to be considered for promotion is a rule prescribing a condition of service. The question to be considered in the present case, however, is whether there is any change as contemplated under Section 9-A. The judgment is of no assistance in this regard. The same is the case with regard to Workmen v. Hindustan Lever Ltd. reported in A.I.R. 1985 S.C. 641, at p. 650. Changes made in the present case are not covered by any of the items in the Fourth Schedule.
33. In any case, since the conditions of service and channels of promotion are laid down by statutory regulations in the present case, they have to be changed only by amendment of these statutory regulations. This has, in, fact been done in 1985. But till the amendment of 1985 such a change could not have been effected. In these circumstances, the Award which is given by the Central Government Industrial Tribunal cannot be considered as perverse. The Tribunal has rightly held that during the period 1981 until the amendment of Regulations in 1985, promotions to the posts of Superintendents ought to have been made and the cadre ought not to have been closed merely on the instruction of the Chairman.
34. It is submitted by Mr. Paranjpe, learned Counsel for the petitioners, that in view of the amendments made in 1985, all fresh appointments and promotions to the cadre of Superintendents have been stopped from 1.7.1.985. He has submitted that, therefore, even in the existing vacancies no promotions can now be made to the cadre of Superintendents. The amendment prohibits promotions to existing vacancies. Such vacancies are those arising in the normal course of administration. They cannot cover vacancies which arose as a result of an unauthorised action of the Life Insurance Corporation and its Chairman. The Tribunal has given detail directions in relation to the posts of Superintendents which ought to have been filled between 1981 and 1985 and has given directions as to the manner in which those posts are to be deemed to have been occupied. The Tribunal has given detail directions that no such promotionscan be made with effect from 1.7.1985 in view of the amendment. The Award, therefore, docs not violate in any manner the amendments which have been effected. In these circumstances I do not see any reason to interfere with the Tribunal's findings.
35. Petition is, therefore,, dismissed and the rule is discharged.
36. In the circumstances of the case there will be no order as to costs.
37. On the application of the petitioners status quo to continue for a period of four weeks.